BUSINESS, INNOVATION AND SKILLS

Regulatory Enforcement and Sanctions Act 2008

Michael Fallon: I am announcing today that when considering whether to make orders under the Regulatory Enforcement and Sanctions Act 2008 to provide a regulator with powers to impose certain civil sanctions as an alternative to prosecution the Government will, in general, observe the following principles:
	Powers to impose fixed monetary penalties, variable monetary penalties and restoration notices will, as a general rule, only be granted where their use is restricted to undertakings with more than 250 employees; and
	Powers to impose enforcement undertakings, stop notices and compliance notices may be granted without restriction as to the size of undertaking against whom they might be used.
	I believe that this approach should enable Departments to introduce orders under the Act that provide for a more flexible enforcement system and reduce the burdens on criminal courts. Safeguards on the use of civil sanctions are already contained in the Act.
	This policy will provide a further safeguard as regards new orders under the Act namely that, as a general rule, fixed monetary penalties, variable monetary penalties and restoration notices will only be applied to larger companies rather than to small and medium enterprises who might feel less equipped to challenge the basis for such sanctions.
	Any future plans by Departments to introduce these orders will be announced by them in line with usual practice.

TREASURY

ECOFIN (Budget)

Greg Clark: The Economic and Financial Affairs Council—Budget will be held in Brussels on 9 November 2012. The following items are on the agenda to be discussed (as of 7 November 2012):
	Preparation of the meeting of the Conciliation Committee with the European Parliament
	The Council will aim to agree a final position on the draft budget for 2013, as part of negotiations with the European Parliament via a concurrent Conciliation Committee meeting. The Government will seek a final budget that delivers real budgetary restraint at EU level, supporting ongoing efforts to consolidate public finances across many member states, and that respects the principles of sound financial management.
	As part of this process, the Government expect Ministers to be invited to discuss the Letter of Amendment No. 1 to the Preliminary Draft Budget for 2013, which concerns an overall reduction for the estimated funding needs for agricultural expenditure and international fisheries agreements. The Government are supportive of these technical amendments.
	Ministers are also expected to be invited to discuss the Draft Amending Budget No. 5 for 2012, which would amend the 2012 budget to reflect the mobilisation of the EU solidarity fund, relating to a series of earthquakes in Italy in May 2012. The Government believe that any extra funding needs should be met fully via re-deployments within existing budgets.
	Finally, Ministers may be invited to discuss this Preliminary Draft Amending Budget No. 6 for 2012, which would amend the 2012 EU budget to cover additional funding needs for structural and cohesion funds, rural development and research programmes. In addition, Draft Amending Budget No. 6 includes changes to the estimates of own resources and documents increased revenues from fines. The Government believe that any extra funding needs should be met fully via re-deployments within existing budgets.
	Results of the meeting of the Conciliation Committee with the European Parliament
	The Council will seek to agree to the outcome of the Conciliation Committee conciliation.
	Any other business
	At this time, the Government do not expect any issues to be raised under this agenda item.

JUSTICE

Waterhouse Inquiry

Chris Grayling: Following the Prime Minister’s statement on 5 November, I am announcing today a review of Sir Ronald Waterhouse’s inquiry into the abuse of children in care in the Gwynedd and Clwyd council areas.
	The review will be chaired by Mrs Justice Macur DBE, a High Court Judge of the Family Division.
	The review’s terms of reference are:
	“To review the scope of the Waterhouse inquiry, and whether any specific allegations of child abuse falling within the terms of reference were not investigated by the Inquiry, and to make recommendations to the Secretary of State for Justice and the Secretary of State for Wales”.
	The arrangements for the review will be a matter for Mrs Justice Macur. The Ministry of Justice and the Wales Office will provide support to her, and all relevant material will be made available to support the investigation.
	I am very grateful to Mrs Justice Macur for assuming this important role.

Prison Competition and Efficiency

Chris Grayling: In July 2011 the Government announced the start of a new programme of competition for the management of nine prisons: Acklington and Castington (now together known as Northumberland), Coldingley, Durham, Hatfield, Lindholme, Moorland and Onley, all currently managed by the public sector, and Wolds, currently managed by G4S.
	I have already signalled that I intend to reform community sentences and that most offenders on court orders and on licence will be managed on a payment by results basis by the end of 2015.
	In prisons we must reduce costs further and faster without compromising public safety and I am determined to do so. I can therefore provide an update on this competition programme and outline how I will build on its success to drive down costs quickly across the whole system to improve outcomes and deliver value for money for the taxpayer.
	HMP Northumberland and the South Yorkshire group of Moorland, Hatfield and Lindholme prisons will proceed to the next stage with three remaining bidders, Sodexo, Serco and MTC/Amey before contracts are awarded next year. This competition process produced a compelling package of reforms for delivering cost reduction, improvements to regimes and a working prisons model in these prisons.
	This was not the case for HMPs Coldingley, Durham and Onley, so the competition for these prisons is not proceeding and they will remain in the public sector. For the Wolds—currently managed by G4S—the benefits of the competition when compared to the option of clustering the Wolds with the nearby prison Everthorpe, did not represent best value to the public. I have therefore decided not to progress with the competition. This means that when the current contract expires in July 2013, the prison will move to public sector management.
	This current competition process has identified the means to accelerate cost reductions. It has set a new benchmark for running prisons which we will now
	apply to all public sector prisons to maximise savings over the next two spending review periods.
	In response to the competition, a model was proposed that would retain direct delivery of core custodial functions by the public sector at considerably lower cost, with ancillary and “through-the-gate” resettlement services provided through market competition. When applied to the whole public sector prison estate, this option enables us to utilise the market to drive down costs and provides the potential to rapidly expand the payment-by-results approach to improve rehabilitation outcomes. I have decided that this is the right thing to do.
	We estimate an additional £450 million savings will be generated over the next six years by applying this new public sector benchmark and by competing ancillary and through-the-gate resettlement services across all public sector prisons. This is a challenge the public sector must rise to. The approach I am announcing today does not rule out further prison-by-prison competitions in the future.
	I am determined that we will provide enough prison places to accommodate all those committed by the courts. However, prisons must cost less and do more to prevent offenders coming back and we will continue to use competition to drive down costs and improve outcomes.
	The approach I have set out today provides the most effective and intelligent way to achieve this. It is not an end to competition, but rather sets a very clear challenge to the public sector to respond at pace and deliver the reforms required to reduce unit costs across the whole system whilst utilising the market to transform rehabilitation for offenders.